Cyber ‘Catastrophe Bonds’ Set to Test Public Debt Markets (1)

Cyber catastrophe bonds may be about to move out of the shadows of private deal-making and into the public debt markets.

So-called cat bonds, which farm out hard-to-insure risks to capital market investors in exchange for double-digit returns, have typically been built around natural disasters such as hurricanes. But as the potential fallout of business-halting cyberattacks becomes too big to insure, issuers are seizing the moment.

Beazley Plc, which owns specialist insurers across Europe and the US, is exploring a potential $100 million cyber cat bond, according to Artemis, a research firm specializing in insurance-linked securities. And Axis Capital ...